JERUSALEM - Israel has started talks with the European Union over a research grant program subject to new regulations forbidding EU research grants to Israelis working in territories Palestinians want for a state.

Israel's Foreign Ministry said in a statement that talks over the EU's Horizon 2020 program began in Israel Wednesday. It said if a compromise is not reached, Israel wouldn't renew its participation in the program.

Israel says it rejects Europe's terms because they violate Israeli regulations against supporting settlement boycotts. But it doesn't want to lose access to hundreds of millions of dollars in potential research grants.

It's unclear how much room there is for compromise. The EU says it doesn't want to support Israeli settlement activity, but it might seek to avoid a showdown amid Israeli-Palestinian peace talks.